The High-Rise Building Company Uses 400,000 Tons of Stone Per

question 66

Multiple Choice

The High-Rise Building Company uses 400,000 tons of stone per year. The carrying costs are $100/ton. The cost per order is $500. Calculate the economic order quantity per order.

• A)1,000 tons
• B)2,000 tons
• C)3,000 tons
• D)4,000 tons

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Definitions:

Current Assets

Resources anticipated to be exchanged for cash, disposed of, or utilized within a 12-month period or the length of the operating cycle, whichever is greater.

Sales Returns

Transactions where customers return previously purchased merchandise, leading to a reduction in sales revenue for the seller.

Bad Debt Expense

The cost to a company resulting from accounts receivable that are expected to be uncollectible and is considered an operating expense.

Sales Revenue

The income that a company receives from its normal business activities, usually from the sale of goods and services to customers.